A California judge has ordered Uber and Lyft to list their drivers as employees instead of independent contractors. The two ride-share companies have ten days to appeal the decision.
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The ruling stems back to a suit filed in May when California Attorney General Xavier Becarra and other city attorneys from Los Angeles, San Francisco and San Diego. Court documents from the lawsuit stated the companies listed the drivers as independent contractors when they should have been filed as employees due to California’s AB5 law. As covered by the Verge, Supreme Court Judge Ethan Schulman argued in his ruling that ride-share drivers do not perform tasks that is “outside of their usual course” of business.
“Defendants’ insistence that their businesses are “multi-sided platforms” rather than transportation companies is flatly inconsistent with the statutory provisions that ‘engage in the transportation of persons by motor vehicle for compensation’. It is also flies in the face of economic reality and common sense. .. To state the obvious, drivers are central, not tangential, to Uber and Lyft’s entire ride-hailing business.”
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The companies also faced several lawsuits where the state’s labor commissioner claimed the companies were stealing wages from drivers after refusing to claim them as employees. Uber and Lyft previously argued that classifying drivers as employees interferes with needs of several drivers who want to solve independently and can cause a lack of jobs due to the pandemic.
“The vast majority of drivers want to work independently, and we’ve already made significant changes to our app to ensure that remains the case under California law. When over 3 million Californians are without a job, our elected leaders should be focused on creating work, not trying to shut down an entire industry during an economic depression,” an Uber spokesman said.